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Prepare an income statement, beginning with income from continuing operations. (b) Indicate the statement presentation of any item not included in (a) above.

05 / 03 / 2018 Assignment

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Deane Company has income from continuing
operations of $520,000 for the year ended December 31, 2014. It also has the
following items (before considering income taxes):

(1) An
extraordinary fire loss of $140,000.

(2) A
gain of $80,000 on the discontinuance of a major segment.

(3) A
correction of an error in last year’s financial statement that resulted in a
$60,000 overstatement of 2013 net income.

Assume all
items are subject to income taxes at a 25% tax rate.

Instructions

(a) Prepare an income statement,
beginning with income from continuing operations.

(b) Indicate the statement
presentation of any item not included in (a) above.


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